Questions to Ask a Retirement Advisor
Questions for a first meeting with a retirement advisor, or a review with the one you already use. They cover how the advisor is paid, the assumptions behind your target, withdrawal order and taxes, health and long-term care costs, and what leaving would cost.
The questions
Open any question for the note
Are you a fiduciary at all times, and will you put that in writing?
Why ask it
An answer of in most cases usually means the planning advice is held to one standard and the products sold to you are held to another. A written yes is short and easy to produce.
How exactly are you paid: a fee, commission, or both?
Why ask it
Ask for the percentage and the dollar figure on a balance your size. Advisors paid by product commission can be competent, but you should know which recommendations pay them and which do not.
What will this cost me in total in year one, including fund charges?
Why ask it
The advice fee is often the smaller number. Add fund expense ratios, platform charges, and trading costs to see the real annual drag on the portfolio.
What credentials do you hold, and where can I check your record?
Why ask it
Regulators publish registration and disciplinary history. An advisor who names the register and invites you to look is a better signal than one who recites letters after their name.
Who is your typical client, and how many households do you serve?
Why ask it
A practice built around business owners handles a teacher's pension differently. The client count also tells you honestly how much attention you can expect in a difficult year.
How did you arrive at the amount I need, and what did you assume?
Why ask it
Ask for the inflation rate, the expected return, the life expectancy, and the spending figure. Small changes to any of them move the target a long way, and you are entitled to see the inputs.
What happens to the plan if returns are poor in my first five years of retirement?
Why ask it
The order in which returns arrive damages retirees more than the average does. A serious answer involves a cash buffer, flexible spending, or a bond ladder rather than a long-run average.
How much can I spend each year, and what would make you tell me to spend less?
Why ask it
You want the trigger and the review schedule, not just a percentage. An advisor who has never revised a client's spending downward may not be watching closely.
When should I claim my state pension or Social Security, and what did you compare?
Why ask it
Claiming early is often the largest irreversible decision in the plan. Look for a break-even comparison and attention to a spouse's survivor benefit rather than a rule of thumb.
In what order will we draw from my accounts, and why that order?
Why ask it
The sequence across taxable, pre-tax, and tax-free money changes the lifetime tax bill substantially. An advisor with no view on the order is managing investments rather than a retirement.
What is my plan for health coverage before I qualify for public cover?
Why ask it
This gap is one of the largest and most commonly missed costs of retiring early. Ask for a figure per year rather than a reassurance that it is manageable.
How are we planning for long-term care, and what does that assumption cost?
Why ask it
The realistic options are insurance, earmarked assets, family, or reliance on public programs. Leaving it out of the model omits the largest single late-life expense.
What is your view on annuities, and would you earn a commission on one you recommend?
Why ask it
Some annuities solve a real problem by guaranteeing income for life; others are costly and hard to exit. Asking about the commission and the surrender period together gets you the fuller answer.
How will you handle taxes, and will you speak to my accountant?
Why ask it
Conversions, capital gains timing, and required withdrawals all need coordination. Advisors who never talk to a tax professional tend to leave predictable bills unmanaged.
What happens to my plan if you retire, sell the practice, or die?
Why ask it
Many advisors are near retirement themselves. A named successor and a written continuity plan matter more the closer your advisor is to leaving.
Where will my money be held, and who has custody of it?
Why ask it
Assets should sit with a third-party custodian that sends statements to you directly. Any request to transfer funds to the advisor personally is a reason to stop the conversation.
How often will we meet, and what will you send me between meetings?
Why ask it
Ask specifically what happens during a market drop. Advisors who call clients in a bad quarter are offering a different service from those who wait for the annual review.
What is the plan for my spouse if I die first, and do they understand it?
Why ask it
Income often falls further than expenses do, and the surviving partner is frequently the one who never attended the meetings. A plan only one of you can explain is not finished.
What in my current setup would you change first, and what would you leave alone?
Why ask it
An advisor who would move everything on day one is worth questioning. Leaving sound existing holdings in place is a sign of judgment rather than of sales pressure.
How would I end this arrangement, what would it cost, and what could I keep?
Why ask it
Surrender charges, proprietary funds, and transfer fees can make leaving expensive. Ask before you sign, while the answer can still affect your decision.
Working with a Retirement Advisor
Practical guidance for the conversation itself
Before the first meeting
Bring documents rather than estimates
Recent statements for every account, pension projections, the mortgage balance, insurance policies, and a year of actual spending. A plan built on guessed spending is a guess with formatting.
Work out what you really spend
Retirement plans stand or fall on this figure and most people are out by a wide margin. Bank and card statements are more reliable than a budget you drew up for the occasion.
Check the public register first
Registration and disciplinary records are searchable and free in most countries. Five minutes beforehand leaves the meeting free for the plan itself.
Decide what you want the money to do
Leaving work at a certain age, helping a child, staying in the house, leaving something behind. Advisors optimize toward whichever goal you give them, so give them the real one.
Costs to add up before you agree
- The advice fee, as a percentage and as a dollar amount on your actual balance
- Expense ratios of every recommended fund, which are charged on top of that fee
- Any commission or ongoing payment on insurance and annuity products
- Platform, custody, and trading charges
- Exit costs: surrender periods, transfer fees, and holdings that cannot be moved
Warning signs
- A product recommendation before anyone has looked at your spending or your tax position
- Reluctance to answer the fiduciary question with a plain yes and a signature
- Pressure to move everything at once, or a deadline attached to an offer
- Any request to make payments to the advisor rather than to a custodian
- Returns described as guaranteed, or risk described as removed rather than reduced
Common mistakes
Hiring on rapport alone
Trust is necessary and not sufficient. Fee structure and custody arrangements determine what can go wrong regardless of how much you like the person across the table.
Judging by returns rather than by the plan
Withdrawal order, tax timing, claiming decisions, and health costs typically affect the outcome more than beating an index does.
Leaving one partner out of the meetings
The person who did not attend is often the one who has to manage alone later. Both of you should be able to explain the plan without help.
Treating the plan as finished
Tax rules, health, markets, and family circumstances all change. A plan not revisited every year or two quietly becomes a document about a different life.